What could possibly go wrong, from Michael Belkin:
Top 10 Reasons to be Bullish in 2013
1) Congress and the Administration have spending, taxes and the budget deficit completely under control. Fiscal imbalances have been solved and won’t be a problem for the economy or markets anymore.
2) S&P500 earnings are declining and everyone knows stocks go up when earnings go down.
3) Hedge funds have their highest stock market exposure since just before the last time the S&P500 tumbled 50%. 10,000 hedge funds controlling $2 trillion can’t be wrong.
4) NYSE margin debt of $327 billion is the highest since Feb 2008. Forthcoming margin calls like those of 2008 are bullish, because leveraged investors will be forced to liquidate into a declining market.
5) Taxes are going up and government spending growth is going down – which Keynesian economists agree stimulates economic growth, corporate earnings and the stock market.
6) Bernanke has deliberately squeezed investors into equities and the Fed has a perfect contrary record at preventing the last two 50% S&P500 bear markets during 2001-02 and 2007-09. Don’t fight the Fed.
7) Goldman is in bed with the Fed and bullish GS bigwigs say buy cyclicals. Don’t fight the squid.
8) Apple’s gargantuan $160 billion market cap loss (-24%) since September 19th is a generational stimulative event, since AAPL was a top 10 holding of 800 hedge funds and mutual funds at the end of Q3 2012.
9) Even if the market somehow goes down, every other portfolio manager will be down too – so your fund’s investors won’t care and won’t redeem their money.
10) 90% of market strategists and analysts polled by Reuters have a higher end-2013 market forecast. The sell-side consensus is always right and since they anticipate bear markets with pinpoint precision – this is an enormous green light.
Go forth and speculate.
Copyright © Jan 1, 2013 Belkin Report. All rights reserved
Muck About says:
There is only one “speculation” in the markets today that all but guarantee massive profits.
Short bonds. Longer term the better (they have further to fall – remember the early ’80′s when you could get a jumbo CD paying 15%??? It’ll be higher this time) but any bond short is better than nothing.
I’m short using “short” ETF’s like TBF, TBX and there are a bunch more. Google “inverse bond yield ETF’s” or “short bond etf’s” and pick a few.
Stay away from the “ultra” highly leveraged short etf’s as — yes they will make more when yields start rising — but they will be more volatile that I have a gut for.
You will note that long Treasury bonds are now yielding about 3% now? The Fed is wobbling and, sooner than later, will loose control of long bond yields. When that happens (among panics and gnashing of teeth) that investment opportunity of a generation will be shorting those long bonds.
(Here, I assume, most TBPers already have their stash of physical gold and silver as well.)
There will be a loss of control of intermediate and long bond yields, interest rates will start to rise (fast or slow?? Who knows.) and gold and silver will take a big hit to the downside as paper positions in both are liquidated rapidly to go long on bonds when interest rates rise. Further, interest rates only need to rise a percent or two to strip off the naked emperors make believe clothes and expose the fact that the U.S. is totally bankrupt with the debt SERVICE exceeding any possibility of being repaid short of all out inflation and debasement of the money supply.
We are about to enter the whirlwind and you’d best be prepared a year early that a week too late. Take your positions now, accept the volatility that comes with any collapse of a paradigm both over used and miss used. When the SHTF on this one is will world wide and there will be no escape for the 95% that line the lower economic scales and the 50% the think government money is “free” and belongs to them as a “right”. Their “rights” are about to be violated in a most crass way.
The bankers (including their servant, The Fed) are getting really uptight because such loss of control of interest rates and money creation will, no doubt, awaken the beast (i.e. the general public) and when that happens they will be forced to actively use the militarized Federal, State and Local forces to run around pissing on brushfires, further complicating the picture. They may even have to ignore the Posse Comitatus Act and utilize military forces within the boundaries of the U.S.A. to suppress the misery that will become apparent in short order. The Federal Government has destroyed the Constitution already so what’s just another violation of the law in ignoring the Posse Comitatus Act? Pishhhhh…
We are living in interesting times that are about to get terrifying.
MA
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8th January 2013 at 11:51 am
Thinker says:
Was hoping to see the
at the end.
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8th January 2013 at 11:55 am
AWD says:
I was thinking of shorting Bank of America (BAC), it’s trading at a ridiculously high multiple, and everyone knows it’s insolvent. Not only that, but they just agreed to shell out $10 billion to settle mortgage lawsuits. The stock dropped 2 cents on the news.
There is no more cause and effect in the markets anymore, no rhyme or reason. The HFT algos, and the banksters/traders behind them have taken over the market. End of story. The average joe (Muppet) doesn’t stand a chance and there is no longer any sanity in the markets. If only they published a daily HFT algo report, saying which way and what stocks were going to be manipulated that day, we might stand a chance. Otherwise, you might as well go to the casino and put your money on red or black. At least with a casino, you know what the odds are.
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8th January 2013 at 12:06 pm
Eddie says:
Shorting big banks carries the same risk as shorting the long bond. You are fighting the Fed either way.
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8th January 2013 at 12:24 pm
Erasmus says:
James Turk predicting $8000 Gold sometime between 2013 and 2015.
http://www.goldmoney.com/video/james-turk-outlook-for-gold-for-2013-to-2015.html?gmrefcode=gata
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8th January 2013 at 2:13 pm
Scott says:
Investment performance is always relevant. The world is hurdling toward what seems to be certain economic collapse. If your expectations are similar to mine, then you should be exploring ways to prepare for something that eventually will become an economic dark age. Folks we have passed the point where a return to normalcy is possible. There can be no political solution to our insolvency issue, but there will be a market solution. We will continue down the extend and pretend road until markets halt the fraud. A complete financial collapse is likely.
The worst economic period in this nation’s history is ahead. The investing guidelines of the last five decades are suddenly questionable. They no longer seem to exist. The once golden rule of investing, buy and hold in today’s markets is likely to cost you dearly. The notion that long term investing in stocks will produce an average of 8 to 10 percent annual return was more marketing than truth. How could this return be achieved when the economy itself only grows at 3% real growth per year?
In 12 years stock prices have done nothing! Put this 12 year period into perspective. Anyone who bought and held the S&P 500 has made no profit in the twenty-first century if they had held on to
their stock. Given this poor performance, why does anyone invest in a market that has become increasingly risky and increasingly less rewarding? Over the last twelve years, those who stuffed money into mattresses fared as well as the average stock market investor. Neither group kept up with inflation, but the mattress stuffers did not suffer the nerve-wracking draw downs in wealth experienced by market investors.
Given this poor performance, why does anyone invest in a market that has become increasingly risky and increasingly less rewarding? For someone trying to acquire wealth for retirement, or most other purposes, crazy swings like this cannot be appropriate for such goals. Why would anyone subject his-her life to such volatility?
The stock market seems to be the only game left, at least for most small savers and investors. Equity risks have increased while returns on safer investments, bonds and other fixed income securities have been driven down. This financial repression forces people out of these safer markets because they cannot get a return that keeps up with inflation.
This only leaves the stock market where many with no knowledge of financial markets desperately seek return. Many of these are the elderly who should not have their retirement funds at risk, but can get no return elsewhere. The human cost to this current generation should not be overlooked. Seniors are forced to live out their lives in fear of running out of money. Income earners are unable to develop wealth as a result of damaged financial markets
The massive interventions of the Federal Reserve has produced this current situation. The cost on citizens of irresponsible government and Federal Reserve policies goes well beyond those imposed on future generations by deficits and bank bailouts.
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8th January 2013 at 12:12 am